Russia to loan Chavez $1 billion for arms

Russia will give Venezuela a credit for $US 1 billion, a Kremlin source said to RIA Novosti news agency. The money will give a boost to the military co-operation between the two countries.

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Venezuela has become a major buyer of Russian military hardware recently. Caracas has purchased 100,000 AK-103 assault rifles along with 40 Su-30MK2 jet fighters and about 50 combat helicopters, says Interfax-military news agency. On the future shopping list are 20 Tor-M1 air defence systems and three or more submarines.

The Russian defense budget for 2009 is $46 billion. So this loan is worth 2.17% of annual Russian defense spending. No small amount!